India seeks answer to anomalies behind GDP growth, unemployment rise

IANS . New Delhi | Update:

Supporter of India`s ruling Bharatiya Janata Party (BJP) wearing masks of prime minister Narendra Modi attend an election campaign rally addressed by Modi at Moran town in the northeastern state of Assam, India, on 30 March 2019. Photo: ReutersWith the general elections around the corner, the job scenario in the country is not very clear. Several experts have expressed doubt over the unemployment, growth rate figures and have alleged that the government was suppressing uncomfortable data.

Explaining one such point of contention, R Nagaraj of the Indira Gandhi Institute of Development Research told IANS that as the employment rate has fallen, one would also expect output growth to have decreased unless there is a huge rise in productivity per worker for which there is no evidence.

"So, the rising GDP and declining employment rate for the same year seems anomalous," he said.

Nagraj, alongside several economists, in a statement released earlier this month, questioned the government's intent behind the Gross Domestic Product (GDP) methodology revision, and called for the restoration of independence of statistical bodies in light of the allegations that government was suppressing uncomfortable data.

On a similar note, former RBI governor Raghuram Rajan said in a TV interview last week: "I know one minister has said how can we be growing at 7 per cent and not have jobs. Well, one possibility is that we are not growing at 7 per cent."

A number of experts have questioned the withholding of data by the Niti Aayog.

Nargaj said that the unemployment data (Periodic labour force survey, PLFS) was not released and as per the laid out procedure, Niti Aayog has no role in the release of PLFS data. However, it has interfered and found shortcomings in PLFS methodology.

"To best of my knowledge, Niti Aayog does not have required expertise on statistical matters," he said.

Doubts over the GDP data strenghtened, especially after demonetisation. Several economists had predicted that demonetisation would impact the GDP growth rate by a reduction of up to 2 per cent.

"GDP base year revision, which happened in 2015 is a one in 7-10 year process, which is routine. Yearly, GDP numbers over the world undergoes many revisions before they are finalised, which is also routine," Nagraj said.

"But what looks anomalous is that the GDP growth rate for 2016-17, the year of demonetisation after the latest revision released in January, looks exceptionally high at 8.2 per cent when most economists expected a fall in GDP growth rate."

Despite the high voltage debate around whether the government is trying to hide uncomfortable data, one piece of data that is no longer available is National Crime Records Bureau (NCRB) statistics on suicides in India, which was stopped after 2015.

The NCRB data was widely used to analyse farmers suicides and evidence of the agrarian distress.

Institutional independence of statistical bodies too is under question after the resignations of the members of the National Statistical Commission.

Nagraj suggested that the way out is to set up an independent international body of experts to undertake a statistical audit of the GDP revision process and other data series, as was done a few years ago in Argentina to correct for its inflation data.

Earlier this year, a report citing National Sample Survey Office PLFS data, the publication of which was withheld, revealed that unemployment in the country was at a 45-year-high of 6.1 per cent in 2017-18.

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